BAE Systems Unveils Next Major Step in Colossal T26 Warships Development

BAE Systems does not have a 'Plan B' in place, in the event of Scottish independence, despite warning the markets that a 'Yes Vote' would mean it has to consult the UK defence ministry over its major Type 26 (T26) warships contract future.

Speaking to IBTimes UK in London, BAE Systems' T26 global combat ship programme director, Geoff Searle, said there's no contingency plan in place for Scottish independence but the group will consult the UK defence ministry in the event of a union break.

"We are planning the T26 programme based on building the 13 warships in Glasgow," said Searle.

"In the event of independence, we would have to work with UK government on the future of the programme and the future of UK shipbuilding. But all of our plans are based on building ships in Glasgow.

"We are [still] investing in facilities, in engineering, skills and young engineers in Glasgow and the overall project will be of significant benefit for the whole of the UK. However, no [we don't have a plan B]."

The Scots will be asked the straight "yes/no" question: "Should Scotland be an independent country?" on 18 September this year.

The referendum period started on 30 May.

Both Britain's defence sector, which is currently worth £22bn (€27bn, $37bn), and its aerospace sector, which employs 230,000 people, base a large portion of their key operations in Scotland.

BAE has 30,000 staff across Britain and market capitalisation of £13.2bn.

Under current plans, BAE will manufacture 13 T26 warships for Britain's Royal Navy from 2016.

The ships are set to be launched in 2020 and will be functioning as part of the Navy until 2060.

UK suppliers will account for 80% of the programme and go directly back into the economy. The remainder will pump money back into the wider European Union.

Searle adds that the T26 programme will create and maintain thousands of jobs in Britain.